Posts Tagged ‘MMM’

GDWheee Friday – Could be a Wild Ride!

Attention ladies and gentlemen:

The stock market will soon be leaving the station, please secure all personal items, pull down the safety bar (our Disaster Hedges) and keep all body parts inside ride at all times.  Well you know you can follow all of the safety instructions and STILL get smacked in the face with a black swan (like our friend Fabio, pictured here) which is why we elected to get back to cash ahead of this report.  The markets were just too insane this week and who the heck knows if Europe will still be a Union on Monday or what the GDP number is going to be (but I do think it's a miss). 

Since our biggest weekend fear is financial panic in Europe, our cash US dollars will become more valuable in a crisis and if the market drops, all the better as we can ride back in and do some bargain hunting.  If the market takes off on good GDP and Greece is "fixed" and Spain is "fixed" and Portugal and Ireland are not really a problem (especially for MS and JPM) and the CRIMINAL charges against Goldman look beatable and and the Financial Reform Bill doesn't disrupt the market with a disorderly breakup of the big banks and the Bank of International Settlements Report continues to be ignored and the run on the Greek banks doesn't spread to other STUPID counties – well, then we can BUYBUYBUY because, if all this doesn't matter, then it's very likely that the entire planet Earth could explode but Wall Street will keep ticking higher.

Yep, I can't wait to ride this baby mindlessly higher!  After all, what can go wrong?  BIDU is ONLY $710 a share, BLK is $190, CMP is $76, GOLD is $84, BUCY is $65, FAST is $56, MMM is $90, FOSL $40, F $13.50, DECK $149, SHOO $55, TPX $35, LZB $14, CTB $22, NOG $16, CEO $176, FTI $75, CLB $150, CIB $46, BBD $19, TD $75, BCA $45, BAP $87, ITUB $22, EDU $94, WYNN $93, FFIV $72, CY $14, CREE $77, UPS $70, UNP $78… 

These were stocks I was looking at last week, when I told members I thought it was easier to construct a Sell List than our usual…
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Goldman Sachs-Bulls with Butterfly Wings are at it Again

Today’s tickers: GS, WU, DSW, MGM, WMT, BAC, EEM, WLP, HD & MMM

GS – Goldman Sachs Group, Inc. – Goldman-optimists are once again employing bullish butterfly spreads on the stock in order to efficiently position themselves to profit from an eventual rebound in the investment banking firm’s share price. Goldman Sachs, one of the top tickers on our ‘most active by options volume’ market scanner, glowed green amid a sea of red today as its shares inched up 1.75% to $154.69 as of 3:20 pm (ET). The bullish butterfly spread initiated on GS this afternoon yields maximum benefits to the investor responsible for the transaction if shares of the underlying stock jump back up to $175.00 by October expiration. The parameters of this spread are a bit different than the larger-volume butterfly spread we reported on Monday afternoon, which prepared an investor to reap maximum profits should Goldman’s shares rally up to $160.00 by expiration day. Today’s transaction involved the purchase of 2,000 calls at the October $160 strike for an average premium of $12.80 apiece [wing 1], and the purchase of another 2,000 calls at the higher October $190 strike for $3.90 each [wing 2]. The body of the butterfly was established at the central October $175 strike where 4,000 calls were sold for $7.20 a-pop. Net premium paid for the spread amounts to $2.30 per contract. The net cost of the trade pales in comparison to maximum available profits of $12.70 per contract, which the trader pockets if Goldman’s shares surge 13% over the current price to settle at $175.00 at expiration. The butterfly-spreader starts to make money as long as shares of the underlying stock increase 4.9% to surpass the breakeven point to the upside at $162.30 ahead of October expiration.

WU – Western Union Co. – Shares of the world’s largest money-transfer business surged 9.25% to an intraday high of $19.57 after the firm posted first-quarter earnings of $0.30 per share, which satisfied average analyst forecasts. A couple of analysts raised target share price estimates for Western Union following the positive earnings report. WU’s target price was bumped up to $23 from $19 at Susquehanna, in addition to the move up to $21 from $18 at D.A. Davidson today. Western Union’s current CEO, Christina Gold, is also reportedly handing over the reins to the current COO, Hikmet Ersek, on September 1, 2010. One Western Union…
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Visa-Bulls Covet Call Options

Today’s tickers: V, RDC, VALE, EEM, STX, XRT, FXI, VZ, IPI & MMM

V – Visa, Inc. – Call options on credit card company, Visa, Inc., are in high demand today by investors who appear to be expecting a sharp rally in the price of the underlying stock by April expiration. Visa’s share price increased 0.85% to $91.00 in afternoon trading. Bullish options players purchased about 4,000 calls at the April $95 strike for an average premium of $0.60 apiece. Call-buyers at the April $95 strike stand ready to accrue profits if Visa’s shares rise 5% to surpass the effective breakeven price of $95.60 by expiration day in April. Other optimistic options traders picked up approximately 5,000 calls at the higher April $100 strike for an average premium of $0.15 each. These investors make money if shares of the underlying stock surge 10% to exceed the breakeven price of $100.15 by expiration.

RDC – Rowan Companies, Inc. – Shares of the onshore and offshore contract drilling company leapt up 6.4% to briefly touch a new 52-week high of $29.40 in afternoon trading perhaps on news Rowan has “made no change in plans to shed its onshore oil and gas drilling business and LeTourneau Technologies Inc. manufacturing unit to focus on offshore projects.” Rowan’s shares are still net up for the session by 1.95% to $28.17 as of 2:50 pm (ET). Bullish options traders scooped up nearly 8,000 call options at the April $30 strike for an average premium of $0.45 per contract. Call-buyers are positioned to make money if Rowan’s shares jump 8% from the current value of $28.17 to breach the breakeven point at $30.45 ahead of April expiration day. Investors exchanged more than 25,500 contracts on the stock throughout the session, which represents 46.75% of total open interest on RDC of 54,546 lots.

VALE – Vale S.A. – Covered-call selling on Brazilian iron ore producer, Vale S.A., indicates one investor is expecting shares of the underlying stock to continue to rally to new highs for the year through May expiration. Vale’s shares gained 2% earlier in the current session to attain a new 52-week high of $32.66, exceeding yesterday’s new high of $32.00. The so-called buy-write strategy observed today took place at the May $33 strike where one optimistic individual shed 10,000 calls for a premium of $1.33 apiece. At the same time, the investor purchased an equivalent…
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Testy Tuesday – Things Start To Go Wrong

Over 100 people were killed by car bombs in Baghdad at about 3:30 this morning.

That got Europe off in a foul mood this morning and poor earnings guidance from MMM didn't help, nor did poor Industrial Production numbers out of Germany or new fears that Dubai World will cause massive losses (Nakheel lost $3.65Bn in it's first half report).  Then Moody’s Investors Service said today deteriorating public finances in the U.S. and U.K. may “test the Aaa boundaries” while Fitch Ratings downgraded Greece’s credit grade to BBB+.  Ben Bernanke told the Washington Economic Club yesterday that the U.S. economy faces “formidable headwinds” but, on the bright side Japan’s government backed a stimulus package worth 7.2 trillion yen ($81 billion).   

Before we know it, futures are off 100 points at 7:30.  Hopefully we don't break below 10,320 at the open as we covered our long DIA puts to that spot, more worried about a bounce up than a market move in our generally bearish direction.  We had a very nice day yesterday with our $100K Virtual Portfolio already making it's target $1,000 for the week so locking in the gains seemed prudent but maybe we could have been greedier…

Central banks and governments around the world are totally right in saying that the recovery is still very weak,” Philippe Gijsels, a senior structured product strategist at Fortis Global Markets in Brussels, said in an interview with Bloomberg Television. “Going into 2010 I would be extremely surprised if we do not see a serious hiccup somewhere.”  German industrial output unexpectedly fell for the first time in three months in October, led by a drop in production of energy and investment goods such as machinery. Output decreased 1.8 percent from September, when it advanced 3.1 percent, the Economy Ministry in Berlin said today. Economists forecast a 1 percent gain,  off by 280%, according to the median of 38 estimates by "expert" economists in a Bloomberg survey.  

Moody's fingers the U.S. and U.K. among top-rated sovereign borrowers, saying they must prove they can reduce their bulging deficits or risk a downgrade to their AAA credit ratings. Under its most pessimistic scenario, the U.S. could lose its rating in 2013 if economic growth lags, interest rates rise and the government fails to shrink the deficit or recover its loans to the financial sector.


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Monday Malicious Microbe Mania

Just when you thought it was safe to invest in Asia!

Today’s shocker came out of a World Health Organization meeting yesterday where officials estimate 20% to 30% of Asia’s population -  or between 448 million and 672 million people will be infected by swine flu H1N1 this season.  Hong Kong had their 15th death this weekend and eight more people are in critical condition.  492 new cases were confirmed over the weekend, bringing the official count in Hong Kong alone up to 22,054 infections.  According to the WHO: "China may not be in a situation of what we call extensive local transmission, which Hong Kong is in now." Once it does happen, we can see a lot of severe cases." 

It’s ironic that the G20s efforts to put lipstick on this pig of a global economy may all be derailed by a pig’s disease.  Despite skipping testing and relaxing safety regulations (which will, of course lead to other problems) in order to get tens of millions of doses of vaccines out for mass-inoculation programs, the WHO estimates that China, at best, will be able to inoculate just 5% of the population (65M people).  We went through our last major swine flu scare last April and, here at PSW, we turned it into a half-dozen very successful picks – so let’s look at a few more who should do well in this next round of the crisis: 

  • SVA is the primary vaccine maker in China and you can buy that stock for $8.88 and sell the Jan $7.50 puts and calls for $4.50, which is net $4.38 with a call away at $7.50 (up 71%) if they hold that level through Jan 15th and the break-even to the downside (where you would be assigned the puts) is $5.94, 33% lower than today’s price.  I’m not one to jump on disaster plays usually but this one has pretty good odds. 
  • BCRX has Perimavir in late-stage trials and the FDA is considering a "pre-emergency use authorization review," of the drug, which would be great for BCRX if it goes through and bad if it doesn’t.  As BCRX is already up a lot, the way I would play this one is buying the 2011 $10 calls for $4.10 and selling the 2011 $12.50 calls for $3.60, which is a net .50 entry with a 500% return if BCRX hits $12.50 in 15 months (now $10) and it shouldn’t cause too


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Canadian Energy Bulls Seek Call Options in Suncor

Today’s tickers: SU, EEM, IBM, AXP, MOS, GE, YHOO & MMM

SU – The Canadian energy company appeared on our ‘most active by options volume’ market scanner today following a frenzy of bullish call buying activity in the August contract. Suncor’s shares climbed more than 4% during the trading day to $30.61, leading stocks in Canada higher on the rise in price of oil and the unexpected increase in June housing starts. Option-bulls purchased more than 17,000 calls at the August 31 strike price for an average premium of 1.56 apiece. Shares of SU must rally higher by about 6% in order for investors to begin to amass profits beyond the breakeven point of $32.56. Traders expecting an even sharper rise in the price of the underlying were seen picking up 5,300 calls at the higher August 32 strike for 1.00 per contract. These individuals are hoping shares breach $33.00 by expiration next month. – Suncor Energy Inc.

EEM – The emerging markets exchange-traded fund attracted one trader to initiate a bullish reversal amid a slight 1% rally in shares today to $33.61. The August 33 strike price had 20,000 puts sell for an average premium of 1.28 apiece spread against the purchase of 20,000 in-the-money calls at the same strike for 1.65 apiece. The net cost of the bullish play amounts to 37 cents to the investor responsible for the transaction. Selling the put options reduced the cost of buying the calls such that the trader has already amassed profits. Shares are currently 24 cents higher than the effective breakeven point of $33.37. Continued upward movement in the price of EEM will fatten this investor’s wallet through expiration. – iShares MSCI Emerging Markets Index

IBM – The world’s largest computer-services provider reported second-quarter earnings of 2.32 per share, putting average analyst estimates of 2.02 per share to shame. Shares of the firm have enjoyed a more than 3% rally today to $114.35, following the bullish earnings report. Option traders in the August contract have provided some guidance as to where the stock may be trading through expiration next month. The initiation of a sold strangle indicates this investor wants shares to remain at or about where they currently stand, yet has a decent amount of latitude into expiraiton. About 2,000 puts were sold for an average premium of 97 cents apiece at the August 105 strike price in
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Monday Market Madness – Pandemic Edition!

It’s been a while since we had a flu scare.

We had avian flu a few years ago and the biotech stocks of companies that made vaccine went nuts for a while and then crashed when it turned out to be much ado about nothing.  Of course before that was mad cow and that one devastated the beef and restaurant industry, especially in Europe where steak houses went bankrupt as people refused to eat meat so don’t underestimate how fast panic can spread and habits can change when people start dying.  The pigs are getting a bad rap this time as this particular virus is a mix of swine, bird and human strains but logic doesn’t enter into these things and if the press is determined to label it "swine flu" then you bet that’s what the public will fixate on.

HRL is a big seller of pork products and could make a big breakdown if they can’t hold $30 but, rather than short them, I prefer to get in on a dip as these things do tend to pass.  GSK makes a vaccine and is an obvious upside choice and they’ve been trading well off their highs so make a nice play either way.  The June $30 puts can be sold naked for $2.17 and that’s a nice way to enter the stock (or get paid $2 NOT to buy it).  Also buying the stock at $29.34 (which pays a 5.6% dividend) and selling the June $30 calls for $1.10 and the June $27.50 puts for $1.05 drops the net entry to $27.19 and an average entry of $27.35 if put to you, a nice discount to the current price (see "How to Buy a Stock for a 15-20% Discount" for details on this strategy).  GSK 2011 $25 calls are also pretty cheap at $6.15 ($2 in premium) and we can sell calls against them on a nice run up, perhaps a 1/2 sale of June $30s at $2+ (now $1.10).

NVAX already got a huge pop on Friday when this story first spread and should continue to fly but that’s one of the ones we’re more likely to short as they get overextended.  I think my other favorite upside play is MMM, who don’t make a vaccine but do make those blue masks that governments love to give out to make people feel like they’re doing…
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ValueWalk

Pandemic-related deterioration may cause a drop in PMI

By Gorilla Trades. Originally published at ValueWalk.

In an intra Day note to investors, Gorilla Trades strategist Ken Berman, while commenting on the pandemic-related deterioration, said:

The major indices are all trading lower at midday following another choppy and bearish morning session on Wall Street. The continued exponential growth in the number of U.S. COVID-19 cases and the weak economic data have been weighing on investor sentiment, but stocks are holding up relatively well following yesterday’s bounce. The government jobs report was at the center of attention this morning following yesterday’s record number of new jobl...



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Kimble Charting Solutions

Depression Coming or Is the Bottom Already In? Joe Friday Says Your Answer Lies Here!

Courtesy of Chris Kimble

Are we headed towards a Depression or is the worst already behind us? In today’s world, comparisons to the great depression are easy to find.

Are the Depression concerns well founded or are the declines of late already pricing in a bottom?

In my humble opinion, this chart and the upcoming price action of this index will go miles and miles towards telling us if we are headed towards very tough times or if the huge declines of late are actually in a bottoming process.

This chart looks at the Thomson Reuters Equal Weighted Commodity Index on a monthly basis over the past 54 years. The index has been heading south, reflecting weakness in demand for basi...



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Zero Hedge

Wall Street Wins Again: Banks Force Treasury To Double Rate On Small Business Rescue Loan

Courtesy of ZeroHedge View original post here.

Update (1800ET): And so Wall Street wins again.

After we warned earlier that the SBA's $350BN Paycheck Protection Program, which is expected to be launched at midnight tonight and is meant to bailout America's small and medium business (Steven Mnuchin said that he will double the interest rate on the SBA loan from 0.50% to 1.00% in order to appease banks seeking higher interest rates to participate in the Treasury's bailout program and lend money to the same taxpayers who bailed them out 12 years ago.

These are same banks, mind you, that just s...



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Phil's Favorites

Staggering

 

Staggering

Courtesy of 

We now have data for last week’s initial jobless claims. The number is staggering. 6.6 million filed for unemployment insurance for the first time last week. During the prior week it was 3.28 million. These numbers take your breath away.

Chart via WSJ

Here’s the even worse news – this only records the people who have successfully filed. Many, many more have been locked out of the system so far due to the overwhelmi...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Biotech/COVID-19

Antibodies in the blood of COVID-19 survivors know how to beat coronavirus - and researchers are already testing new treatments that harness them

 

Antibodies in the blood of COVID-19 survivors know how to beat coronavirus – and researchers are already testing new treatments that harness them

A person who has recovered from COVID-19 donates plasma in Shandong, China. STR/AFP via Getty Images

Ann Sheehy, College of the Holy Cross

Amid the chaos of an epidemic, those who survive a disease like COVID-19 carry within their bodies the secrets of an effective immune response. Virologists like me...



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The Technical Traders

Founder of TradersWorld Magazine Issued Special Report for Free

Courtesy of Technical Traders

Larry Jacobs owner and editor of TradersWorld magazine published a free special report with his top article and market forecast to his readers yesterday.

What is really exciting is that this forecast for all assets has played out exactly as expected from the stock market crash within his time window to the gold rally, and sharp sell-off. These forecasts have just gotten started the recent moves were only the first part of his price forecasts.

There is only one article in this special supplement, click on the image or link below to download and read it today!

...

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Chart School

Big moving Averages and macro investment decisions

Courtesy of Read the Ticker

When price is falling every one wonders where demand will come in.


RTT black screen Tv videos study the simplest measure of price (simple moving average). What has happen before guides us now. 














Changes in the world is the source of all market moves, to catch and ride the change we believe a combination of Gann Angles, ...

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Members' Corner

10 ways to spot online misinformation

 

10 ways to spot online misinformation

When you share information online, do it responsibly. Sitthiphong/Getty Images

Courtesy of H. Colleen Sinclair, Mississippi State University

Propagandists are already working to sow disinformation and social discord in the run-up to the November elections.

Many of their efforts have focused on social media, where people’s limited attention spans push them to ...



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Digital Currencies

While coronavirus rages, bitcoin has made a leap towards the mainstream

 

While coronavirus rages, bitcoin has made a leap towards the mainstream

Get used to it. Anastasiia Bakai

Courtesy of Iwa Salami, University of East London

Anyone holding bitcoin would have watched the market with alarm in recent weeks. The virtual currency, whose price other cryptocurrencies like ethereum and litecoin largely follow, plummeted from more than US$10,000 (£8,206) in mid-February to briefly below US$4,000 on March 13. Despite recovering to the mid-US$6,000s at the time of writin...



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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

...

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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.